Lion Global Dynamic Growth SGD Q1 2023 commentary
| Asset classes | Stocks (developed and emerging markets), bonds (investment grade and high yield) and commodities |
| Instruments | ETFs and mutual funds |
| Investment style | Bottom up research and selection of best in class ETFs and mutual funds |
| Quarterly return | 3.46% (net of fees) |
| Annualised volatility (since inception) | 9% |
Market overview
Global equity markets rose by 6.7% (MSCI World Index in SGD terms) in the first quarter of this year, despite the Federal Reserve (Fed) hiking 25 basis points (bps) each in both the February 2023 and March 2023 meetings.
Europe was the best performing region, followed by Japan and US. Asia lagged behind, as China's growth remained slow and Asian exports were weak. Tight labour market conditions kept inflation levels high.
The portfolio gained 3.46% (net of fees) in the first quarter of 2023 driven by good performance by global equities markets, the robust jobs market in the US and weakness in USD currency. Some of the major contributors to performance of the portfolio in last quarter were Schroders ISF European Special Situations fund, LionGlobal Japan Growth fund and the iShares Automation and Robotics UCITS ETF. The main detractor during the quarter was the SPDR Energy Select Sector ETF.
Portfolio performance (net of fees)*
| January | 4.98% |
| February | -2.14% |
| March | 0.71% |
| Since inception (Jan 2016) | 52.81% |
Investment performance of the managed portfolio reflected for the period prior to the launch on 25/02/21 is simulated past performance, based on back-tested performance of portfolio components. For more detail information, see full disclosure in the disclaimer section of the commentary.
Portfolio Allocation (as of 31/03/23)
Outlook
Global growth is slowing this year as the full effects of policy tightening by central banks come through. The probability of a US recession over the next 12 months remains high, although the timing is likely to be pushed out further into 4Q 2023 or next year.In the US, consumer spending has rebounded in recent months due to lower gasoline prices and additional boost in Jan 2023 from bigger Social Security checks. The strong payroll report in Jan 2023 is unlikely to be repeated as layoff announcements have started to increase and there is a lag between announcement and actual layoffs.
In Europe, the relatively mild winter and moderate energy demands have fuelled a rebound in business and consumer confidence, raising optimism that the region may be able to avoid a recession.
In China, growth has rebound strongly on the back of consumer spending, led by the demand in services and improvement in manufacturing activities. However, exports have declined due to weakening external demand. China has set a modest economic growth target of around 5% for the year, avoiding any large stimulus to spur a consumer-driven recovery already underway, suggesting less of a growth boost to the world economy.